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Staff Reports - East Bay Municipal Utility District

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Board of Directors<br />

March 7, 2013<br />

Page 5<br />

county, city, town, township, board of education, or school district from incurring any<br />

indebtedness exceeding in one year the income and revenue provided in that year, without the<br />

assent of two-thirds of the voters and subject to other conditions.<br />

ACA 8 is a constitutional amendment that, pending voter approval, would do two things. First,<br />

ACA 8 would lower the threshold for the voters in cities, counties, and special districts from<br />

two-thirds to 55 percent to approve bonded indebtedness for public improvements. This would be<br />

added as an additional exception to the one percent limit on the property tax rate. This exception<br />

would be for a rate imposed by a city, county, city and county, or special district to service<br />

bonded indebtedness, incurred to fund any public improvements including but not limited to<br />

water, sewer, and wastewater system improvements, police, fire, park, and recreation facilities or<br />

buildings, and related costs, provided that the bond measures are approved by 55 percent of the<br />

voters of the city, county, city and county, or special district.<br />

Special districts use revenues from both local property taxes and bonds to fund public<br />

improvements and vital public services. ACA 8's bond provisions, to lower the voter threshold to<br />

55 percent, would apply to special districts. Thus, in its current form, ACA 8 would benefit<br />

EBMUD by enabling it, if it so chooses in the future, to gain voter approval of new bonds by the<br />

lower voter threshold of 55 percent, rather than the now required two-thirds vote.<br />

ACA 8 would also lower the 55 percent voter approval threshold for a city, county, or city and<br />

county to incur bonded indebtedness, exceeding in one year the income and revenue provided in<br />

that year, that is in the form of general obligation bonds to fund specified public improvements.<br />

This limit does not apply to special districts and thus would not impact EBMUD.<br />

EBMUD has supported similar measures to lower the vote threshold for approval of bonded<br />

indebtedness and special taxes. Last month, the board adopted a support position on SCA 11<br />

(Hancock), to lower the vote threshold for approval of special taxes to 55 percent. SCA 11 is<br />

pending in the legislature. In 2011, EBMUD supported ACA 4 (Blumenfield), which is<br />

substantially similar to ACA 8. ACA 4 failed the advance out of the legislature.<br />

There are currently no entities listed in support or opposition to ACA 8.<br />

ARC:MD:JF

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